Number of first-time buyers coming to the market rockets in 2014

21st July 2014

The number of first-time buyers in the first six months of 2014 reached their highest level since 2007, according to the bi-annual Halifax First-Time Buyer Review.

The research found there were an estimated 144,500 first-time buyers in the first six months of 2014, an increase of 25% on the same period last year – and the highest total for the same six month period since 2007, when the number hit 181,500.

For the third successive year the number of first-time buyers, in the first half of the year, has been over 100,000 representing the strongest performance for this period, since the start of the financial crisis.

The lender found that first-time buyer numbers rose by more than the total number of home movers, at 20% over the same period, increasing their share of the home purchase market from 44% in the first half of 2013 to 46% in the same period this year, marking the highest proportion since 2000.

Mortgage affordability also appears to have improved significantly as the proportion of disposable earnings devoted to mortgage payments by first-time buyers stood at 31% in the first half of 2014; substantially below of the peak level of 47% reached during the same period in 2007 and below the long-term average of 34%.

Craig McKinlay, mortgages director at Halifax, said: “First-time buyers are an important segment on the housing market, accounting for 46% of home purchases in the first six months of the year – up from 44% during the same period in 2013 and 40% in 2012.

“The resurgence in the number of first-time buyers getting on to the housing ladder has been buoyed by improving economic conditions, rising employment levels as well as government schemes such as Help to Buy, which have helped more first-time buyers on to the housing ladder.”

The study also found that almost two-thirds, at 60%, of all first-time buyer purchases in the first half of 2014 were above the £125,000 stamp duty threshold, up from 51% a year earlier. From a national point-of-view, about half of home purchases by first-time buyers were between £125,000 and £250,000, up from 44% from a year earlier.

However costs remain high with the average first-time buyers deposit between April and the end of June at a hefty £31,129, some 9% higher than the typical deposit of £28,463, 12 months earlier.